(WNY News Now) – New Law Requires Credit Card Companies to Provide Consumers a 90-day Grace Period to Use Up Any Points When Rewards Accounts are Closed.
Albany, N.Y. – Governor Kathy Hochul declared a significant consumer protection measure, revealing that a new state law aimed at safeguarding credit card holders’ earned rewards took effect starting December 10, 2023. Under this law, credit card companies are mandated to take extra precautions to shield consumers from losing accrued points in the event of modifications or terminations of rewards programs.
“Protecting New Yorker’s wallets is a top priority and we’re helping families save money this holiday season,” Governor Hochul said. “With this law taking effect, New Yorkers can rest assured that they won’t lose the credit card rewards they’ve earned.”
As per the provisions of the new law, credit card issuers are required to notify cardholders within 45 days of any alterations, closures, or modifications to existing credit card accounts or rewards programs that unfavorably affect the consumer. This encompasses changes that reduce the value of points, impede point accumulation, limit rewards availability, or otherwise devalue the rewards program. Following the dispatch of this notice, consumers are granted a 90-day window to redeem their earned points or rewards, adhering to the original terms and conditions of the program. Notably, the law mandates a grace period even after voluntary account closures.
Consumers often strategically accumulate credit card rewards such as points, airline miles, and cash back to finance trips, vacations, major purchases, or other financial goals. The sudden termination or unfavorable modifications to rewards programs can result in substantial financial losses for consumers who diligently save their points, potentially amounting to hundreds or even thousands of dollars in lost value. The new law recognizes the significance of providing consumers with a buffer period after account closure to maximize the utility of their accumulated points.
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